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Full Text of this Amendment
and to amend the Internal Revenue Code of 1986 to provide tax incentives for the production of renewable energy and energy conservation; which was ordered to lie on the table; as follows:
At the end add the following:
SEC. 831. CREDIT FOR PRODUCTION OF CELLULOSIC BIOFUEL.
(a) In General.--Subsection (a) of section 40 (relating to alcohol used as fuel) is amended by striking ``plus'' at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting ``, plus'', and by adding at the end the following new paragraph:
``(4) the cellulosic biofuel producer credit.''.
(b) Cellulosic Biofuel Producer Credit.--
(1) IN GENERAL.--Subsection (b) of section 40 is amended by adding at the end the following new paragraph:
``(6) CELLULOSIC BIOFUEL PRODUCER CREDIT.--
``(A) IN GENERAL.--The cellulosic biofuel producer credit of any taxpayer is an amount equal to the applicable amount for each gallon of qualified cellulosic biofuel production.
``(B) APPLICABLE AMOUNT.--For purposes of subparagraph (A), the applicable amount means the excess of--
``(i) $1.25, over
``(ii) the sum of--
``(I) the amount of the credit in effect for alcohol which is ethanol under subsection (b)(1) (without regard to subsection (b)(3)) at the time of the qualified cellulosic biofuel production, plus
``(II) the amount of the credit in effect under subsection (b)(4) at the time of such production.
``(C) QUALIFIED CELLULOSIC BIOFUEL PRODUCTION.--For purposes of this section, the term `qualified cellulosic biofuel production' means any cellulosic biofuel which during the taxable year--
``(i) is sold by the taxpayer to another person--
``(I) for use by such other person in the production of a qualified cellulosic biofuel mixture in such other person's trade or business (other than casual off-farm production),
``(II) for use by such other person as a fuel in a trade or business, or
``(III) who sells such cellulosic biofuel at retail to another person and places such cellulosic biofuel in the fuel tank of such other person, or
``(ii) is used or sold by the taxpayer for any purpose described in clause (i).
The qualified cellulosic biofuel production of any taxpayer for any taxable year shall not include any alcohol which is purchased by the taxpayer and with respect to which such producer increases the proof of the alcohol by additional distillation.
``(D) QUALIFIED CELLULOSIC BIOFUEL MIXTURE.--For purposes of this paragraph, the term `qualified cellulosic biofuel mixture' means a mixture of cellulosic biofuel and any petroleum fuel product which--
``(i) is sold by the person producing such mixture to any person for use as a fuel, or
``(ii) is used as a fuel by the person producing such mixture.
``(E) CELLULOSIC BIOFUEL.--
``(i) IN GENERAL.--The term `cellulosic biofuel' has the meaning given such term under section 168(l)(3), but does not include any alcohol with a proof of less than 150.
``(ii) DETERMINATION OF PROOF.--The determination of the proof of any alcohol shall be made without regard to any added denaturants.
``(F) ALLOCATION OF CELLULOSIC BIOFUEL PRODUCER CREDIT TO PATRONS OF COOPERATIVE.--Rules similar to the rules under subsection (g)(6) shall apply for purposes of this paragraph.
``(G) APPLICATION OF PARAGRAPH.--This paragraph shall apply with respect to qualified cellulosic biofuel production after December 31, 2007, and before April 1, 2015.''.
(2) TERMINATION DATE NOT TO APPLY.--Subsection (e) of section 40 (relating to termination) is amended--
(A) by inserting ``or subsection (b)(6)(G)'' after ``by reason of paragraph (1)'' in paragraph (2), and
(B) by adding at the end the following new paragraph:
``(3) EXCEPTION FOR CELLULOSIC BIOFUEL PRODUCER CREDIT.--Paragraph (1) shall not apply to the portion of the credit allowed under this section by reason of subsection (a)(4).''.
(c) Biofuel Not Used as a Fuel, etc.--
(1) IN GENERAL.--Paragraph (3) of section 40(d) is amended by redesignating subparagraph (D) as subparagraph (E) and by inserting after subparagraph (C) the following new subparagraph:
``(D) CELLULOSIC BIOFUEL PRODUCER CREDIT.--If--
``(i) any credit is allowed under subsection (a)(4), and
``(ii) any person does not use such fuel for a purpose described in subsection (b)(6)(C),
then there is hereby imposed on such person a tax equal to the applicable amount for each gallon of such cellulosic biomass biofuel.''.
(2) CONFORMING AMENDMENTS.--
(A) Subparagraph (C) of section 40(d)(3) is amended by striking ``Producer'' in the heading and inserting ``Small Ethanol Producer''.
(B) Subparagraph (E) of section 40(d)(3), as redesignated by paragraph (1), is amended by striking ``or (C)'' and inserting ``(C), or (D)''.
(d) Biofuel Produced in the United States.--Section 40(d) is amended by adding at the end the following new paragraph:
``(6) SPECIAL RULE FOR CELLULOSIC BIOFUEL PRODUCER CREDIT.--No cellulosic biofuel producer credit shall be determined under subsection (a) with respect to any cellulosic biofuel unless such cellulosic biofuel is produced in the United States.''.
(e) Waiver of Credit Limit for Cellulosic Biofuel Production by Small Ethanol Producers.--Section 40(b)(4)(C) is amended by inserting ``(determined without regard to any qualified cellulosic biofuel production'' after ``15,000,000 gallons''.
(f) Effective Date.--The amendments made by this section shall apply to fuel produced after December 31, 2007.
SEC. 832. EXTENSION AND MODIFICATION OF CREDIT FOR BIODIESEL AND RENEWABLE DIESEL USED AS FUEL.
(1) INCOME TAX CREDITS FOR BIODIESEL AND RENEWABLE DIESEL AND SMALL AGRI-BIODIESEL PRODUCER CREDIT.--Section 40A(g) (relating to termination) is amended by striking ``December 31, 2008'' and inserting ``December 31, 2010 (December 31, 2012, in the case of the credit allowed by reason of subsection (a)(3))''.
(2) EXCISE TAX CREDIT.--Section 6426(c)(6) (relating to termination) is amended by striking ``2008'' and inserting ``2010''.
(3) FUELS NOT USED FOR TAXABLE PURPOSES.--Section 6427(e)(5)(B) (relating to termination) is amended by striking ``2008'' and inserting ``2010''.
(b) Modification of Credit for Renewable Diesel.--Section 40A(f) (relating to renewable diesel) is amended by adding at the end the following new paragraph:
``(4) SPECIAL RULE FOR CO-PROCESSED RENEWABLE DIESEL.--In the case of a taxpayer which produces renewable diesel through the co-processing of biomass and petroleum at any facility, this subsection shall not apply to so much of the renewable diesel produced at such facility and sold or used during the taxable year in a mixture described in subsection (b)(1)(B) as exceeds 60,000,000 gallons.''.
(c) Modification Relating to Definition of Agri-Biodiesel.--Paragraph (2) of section 40A(d) (relating to agri-biodiesel) is amended by striking ``and mustard seeds'' and inserting ``mustard seeds, and camelina''.
(d) Eligibility of Certain Aviation Fuel.--Section 40A(f)(3) (defining renewable diesel) is amended by adding at the end the following new flush sentence:
``The term `renewable diesel' also means fuel derived from biomass (as defined in section 45K(c)(3)) using a thermal depolymerization process which meets the requirements of a Department of Defense specification for military jet fuel or an American Society of Testing and Materials specification for aviation turbine fuel.''.
(e) Effective Dates.--The amendments made by this section shall apply to fuel sold or used after the date of the enactment of this Act.
(As printed in the Congressional Record for the Senate on Apr 8, 2008.)